Business Updates: Dealers Pay Record Prices for Used Cars

The agreement eased investor concerns, at least until the first Friday in December, when Congress faces its next deadline to fund the government and raise the debt ceiling. Wall Street had been growing increasingly alarmed by the failure to reach a compromise, and warnings about the consequences of inaction grew increasingly dire. Running into the federal borrowing limit could mean delays in payments of Social Security benefits and to government contractors, including hospitals that accept patients who use Medicare and Medicaid benefits.

“The agreement is just kicking the can down to December, but that’s not something investors are concerning themselves with right now,” said Fiona Cincotta, a senior financial markets analyst at Forex.com. “The political bickering left a cloud over the markets, and the fact that that’s moved on has been a plus.”

Gains were tempered somewhat by a jump in government bond yields. The yield on 10-year U.S. Treasury climbed to 1.58 percent from 1.52 percent, deflating some of the earlier gains in the equity markets.

The two-day rally means that the S&P 500 is now on track to end the week with a gain of about 1 percent, which would be its best weekly showing since late August, before Wall Street grew jittery about the debt ceiling, spiking inflation and the prospect that the Federal Reserve will begin to withdraw some of its support for the economy.

Investors face one more hurdle this week. On Friday, the labor department will release its monthly jobs report for September. It could help economists understand how much the Delta variant of the coronavirus might have affected the economic recovery after hiring slowed dramatically in August. Economists surveyed by Bloomberg are forecasting that the U.S. economy added 500,000 jobs during September, a sharp gain from the 235,000 added in August.

Ahead of Friday’s report, the government said that initial claims for regular unemployment benefits fell last week, dropping to 38,000 to 326,000 after three consecutive weekly increases. For the week ending Sept. 18, about 4.2 million people were receiving some form of unemployment assistance, down 854,638 from the previous week.

“The combination of easing labor supply constraints, strong labor demand and an improving Covid outlook should spur further labor market progress in coming months,” Lydia Boussour, the lead U.S. economist at Oxford Economics, wrote in a note.

Oil prices continued to rise, with West Texas Intermediate, the U.S. benchmark, gaining 1.1 percent to $78.30.

The movement of the Manheim index this summer suggested that consumer prices for used cars were set to cool off, which might mean overall price increases would moderate. But the latest reading suggested that the demand and prices for used cars had reinvigorated as production issues for computer chips continued to hamper new car production. Recent storms, which resulted in potentially hundreds of thousands of flooded cars, have also contributed to demand.

“The new-vehicle production problem worsened instead of getting better in Q3,” wrote Jonathan Smoke, the chief economist for Cox Automotive, the company that produces the index. “Used inventory issues were further exacerbated by damage to vehicles caused by Hurricane Ida in late August, putting pressure on an already historically tight market.”

Mr. Biden is headed to Chicago on Thursday to make the case that vaccine mandates are crucial to the economic recovery. He plans to meet with Scott Kirby of United Airlines, a pioneer in corporate vaccine mandates, and to visit Clayco, a construction company set to announce its own mandate.

As Mr. Biden tries to sell the mandate, OSHA is working on the time-consuming process of writing standards that pass legal muster. The president’s mandate for large employers would affect more than 80 million workers.

The White House said at the time of Mr. Biden’s announcement, in early September, that the OSHA standards would take weeks, which is a typical timeline for an emergency standard. This process includes a number of steps, like demonstrating that workers face a grave danger at work and that a rule is necessary to address the danger.

Almost a month from the initial announcement, OSHA’s standards could still be a few weeks away, as it works through a long list of questions that business groups, like the U.S. Chamber of Commerce and the Retail Industry Leaders Association, have about the finer points of vaccine mandates. A few of the issues include:

• Will independent contractors count toward the 100-employee threshold?

• Who will pay for testing? Companies? The government? The unvaccinated?

• Will vaccine mandates include boosters, if approved?

Attorneys general in 24 states have threatened to sue. Legal experts generally say that OSHA has the authority to introduce a vaccine mandate under powers granted by the Occupational Safety and Health Act of 1970.

Plans for a mandate could also be complicated by state legislation challenging the move. Montana has outlawed employer vaccine mandates. OSHA’s standards pre-empt state governments’ existing rules, except in states that have their own OSHA-approved workplace agencies. (About half do.) The legal basis for a challenge is likely to be weakest in states that are directly within OSHA’s jurisdiction, which include Montana, Texas and Florida.

Even after OSHA finalizes its rules, some employers wary of mandates may not act, betting that they won’t be punished because of the agency’s limited enforcement resources, or decide to wait out any legal battles before putting in place any requirements of their own.

As executives await more details, a cottage industry has emerged to help companies with everything from testing to tracking vaccinations. Smaller employers, in particular, are worried about managing the new requirements, given their limited resources.

ReturnSafe, a software company that can integrate building access systems with vaccine records, said it had gone from an average of 40 to 60 people booking a meeting via its website every week to almost 300 requests per week after Mr. Biden’s announcement. ADP, a payroll processing company, has updated its “return to workplace” software to add features to track vaccination status and weekly Covid-19 testing. Labor lawyers are walking companies through the complex task of handling requests for religious exemptions to vaccine mandates.

The White House released details on its mandate for federal contractors this month, which gives those workers until Dec. 8 to comply. The guidelines are stricter than the proposed rules for private employers: For example, there is no option for the unvaccinated to submit to regular testing instead of getting inoculated. A White House official said the administration expected many companies ultimately to announce vaccine-only policies. IBM and United Airlines noted that their mandates brought them into compliance with the rule for federal contractors.

United, which announced its mandate in August, recently reported that 99 percent of its workers had been vaccinated and that it had received 20,000 applications for about 2,000 flight attendant positions, a much higher ratio than before the pandemic. Tyson Foods reported a 91 percent vaccination rate ahead of a November deadline, compared with less than 50 percent before its mandate announcement in August. These figures challenge the concerns among some employers that mandates would cause workers to quit, particularly in industries facing labor shortages.

Still, “some companies are looking at it and saying: ‘Great that those employers had a good experience. I don’t know if we’ll have the same experience,’” Douglas Brayley, an employment lawyer at Ropes and Gray, told The New York Times’s DealBook newsletter. “Or, they may look at it and say, ‘Great, they had a 91 percent vaccination rate, but we are so thinly staffed we couldn’t possibly lose 9 percent of our work force.’”

Noam Scheiber contributed reporting.

Tesla’s board opposes all those measures and has encouraged investors to re-elect Mr. Murdoch and Kimbal Musk.

A federal jury on Monday dealt Tesla a blow by siding with Owen Diaz, a former contractor who said he faced repeated racist harassment while working at Tesla’s factory in Fremont, Calif., in 2015 and 2016. The jury ordered Tesla to pay Mr. Diaz $137 million. Tesla faces similar accusations from dozens of others in a class-action lawsuit.

Under a proposal from Calvert Research and Management, a firm that focuses on responsible investment and is owned by Morgan Stanley, Tesla would have to publish annual reports about its diversity and inclusion efforts.

Another proposal, by Nia Impact Capital, which owns fewer than 1,000 Tesla shares, would require the carmaker to publish a report on its practice of using mandatory arbitration to resolve employee disputes. That practice, Nia argued in its proposal, presents “a long-tail risk” to Tesla and can make it harder for companies to identify and address widespread discrimination.

Separately, ISS, a firm that advises investors on shareholder votes and corporate governance issues, has opposed the election of Mr. Murdoch and Kimbal Musk because it says the board hasn’t justified the compensation it pays to some of its members, including nearly $6 million last year to Robyn Denholm, who chairs the board, and more than $9 million to Hiromichi Mizuno, mainly in stock option grants.

While Mr. Murdoch received only $32,500 for serving on the board last year and Mr. Musk received $20,000, the amounts paid to the other members are much higher than is typical at similar large corporations, according to ISS. Because Mr. Murdoch and Mr. Musk are the only members up for election, they should be denied a chance to continue serving on the board, ISS said.

“Accordingly, support is not warranted for directors responsible for approving director pay,” the firm said in a note to clients last month.

Mr. Musk and Mr. Murdoch hold shares and options in the company that are worth hundreds of millions of dollars at the current share price, according to Tesla’s most recent proxy filing with the Securities and Exchange Commission.

Tesla’s board said the pair should remain. Mr. Murdoch provides the company with deep executive experience, knowledge of international markets and experience with adopting new technologies, it said in a securities filing. Mr. Musk brings experience in retail and consumer markets and technology companies. Mr. Murdoch has been on Tesla’s board since 2017 and Kimbal Musk has been a board member since 2004.

Peter Eavis contributed reporting.

“The email from WilmerHale requesting my participation said clearly that I was not a subject of the investigation and assured me that my testimony was confidential and protected by World Bank staff rules, which guarantee due process,” Ms. Georgieva said. “None of this proved to be true.”

The controversy surrounding Ms. Georgieva has raised questions about China’s influence in multilateral institutions. It has also become a distraction for the I.M.F. as it is trying to help coordinate the global economic response to the pandemic. Prominent economists have publicly debated whether she should step down. The Economist magazine called last month for Ms. Georgieva’s resignation.

The United States, which is the fund’s largest shareholder, has yet to offer public support, and officials have declined to say if she should stay in the job.

“There is a review currently underway with the I.M.F. Board, and Treasury has pushed for a thorough and fair accounting of all the facts,” said Alexandra LaManna, a Treasury spokeswoman. “Our primary responsibility is to uphold the integrity of international financial institutions.”

Former World Bank officials have described Ms. Georgieva as a polarizing figure, but she has generally won praise at the I.M.F. When she assumed the job in 2019, she quickly restructured the fund to assume more direct control over its daily operations. That included removing David Lipton, a long time I.M.F. official and its first deputy managing director, before his term expired.

Mr. Lipton is now a top adviser to Treasury Secretary Janet L. Yellen, who will have significant input as to whether Ms. Georgieva remains in the job.

Republicans and Democrats in Congress have expressed concern about Ms. Georgieva’s actions at the World Bank and called on Ms. Yellen to ensure “full accountability.”

The United States traditionally selects an American to be president of the World Bank, while the managing director of the I.M.F. is usually from Europe.

The I.M.F.’s executive board will meet again on Friday and could make a decision about whether it continues to have confidence in Ms. Georgieva.

The annual meetings of the World Bank Group and the International Monetary Fund take place next week.

The fact that it is developing climate scenarios puts the Fed more in line with its global counterparts, including the European Central Bank and the Bank of England, that have been examining what climate-related risks could mean for the banking sector. In addition, the Fed and its leader, Jerome H. Powell, have faced backlash for moving slowly toward a more concerted climate push.

Mr. Powell had also suggested that the Fed would test banks’ exposure to climate problems, though his remarks, to lawmakers during testimony last week, were not as definitive or as detailed as Ms. Brainard’s. He explained that the Fed’s goal was to make sure regulated banks could manage any of the risks that threats like climate change posed.

“Scenario analysis is almost certainly going to be one of the principal tools for doing exactly that,” Mr. Powell said.

The central bank oversees the nation’s largest banks, including institutions such as Goldman Sachs and Bank of America.

Overall, air travel appears to have settled at about 75 percent of 2019 levels in September, according to data from the Transportation Security Administration. The Biden administration’s plan to relax travel restrictions on vaccinated foreigners starting next month is expected to provide another boost, especially around the holidays.

United said it expects the Wednesday before Thanksgiving and the Sunday after the holiday to be particularly busy. It also expects Thursday, Dec. 23, and Sunday, Jan. 2, to be popular travel days.